Rupee Range-Bound Against $, Forwards Up

FOREX REPORT

The rupee remained range-bound in the face of dull trading in the inter-bank forex market yesterday. It closed at 35.85-87 after opening at 35.85-86. The forwards segment witnessed some volatility with the six-month annualised premium closing higher at 8.48 per cent.

The spot market was dull despite marginally higher volumes. The State Bank of India (SBI) was in the market, but purchased only a nominal amount of dollars, and, during the course of the days trading, the rupee depreciated by one paise to the closing levels. The Reserve Bank of India (RBI) was not in the market. The cash-tom was -.25/.25 paise, the tom-spot was -.25/.25 paise, and the cash-spot was -.25/.75 paise.

 

The forward market was relatively active yesterday. In the earlier half of the day, the premiums shot up with a fair amount of paying interest in a thin market. The premium for July went as high as 166-169. However, after that, receiving pressure started mounting from various fronts. A leading term lending institution started selling the forward dollar for January. Exporters, attracted by the high levels, came in to sell forward dollars. All this pushed the premiums down.

The monthly premiums in paise were 7-10 for January, 26-29 for February, 56-59 for March, 85-88 for April, 109-112 for May, 132-135 for June, and 157-159 for July. The one-year forward premium was quoted as 280-300 paise.